In modern-day America, it’s not unusual to hear stories of people who are paying a premium for high-speed Internet services, yet still can’t manage to stream videos on YouTube or Netflix without excessive buffering. At times, these hiccups can feel as slow as dial-up, and it’s frustrating.

And while America has one of the worst Internet infrastructures of all first-world countries, even the higher-speed networks of Europe and Asia can suffer this problem from time to time. What’s causing it? And is there a way around it? Shouldn’t we be past this in 2016?

ISP peering is one of many factors that could be affecting your network speeds, yet not many people know what it is. If you fall into that group, don’t worry. We’re here to shed some light on it all.

The What and Why of ISP Peering

To understand ISP peering, we must first understand the general architecture of the Internet as a whole.

People tend to refer to “the Internet” as one massive network that stretches over the entire world, and while this might be true in an abstract sense, it oversimplifies the real nature of it. The Internet is actually a big network of many smaller networksHow the Internet WorksHow the Internet WorksWe can now access the Internet from our home computers, office, laptops and our phones. But many people still aren't entirely sure what the Internet is and how it really works.Read More that communicate using the same standard protocols.

Network A can be connected to Network B in one of two ways: a transit relationship (where Network A pays Network B to carry its data) or a peering relationship (where Network A and Network B agree to send data back and forth without charging each other).

Transit relationships usually exist between a smaller and a larger network, where the larger network carries the smaller network’s data for a fee. Peering relationships usually exist between large networks of similar size as both networks can benefit equally from the agreement.

At the very top of the hierarchy, you have the big Tier 1 networks that are only involved in peering. These ISPs don’t provide home Internet access. Instead, their only concern is to connect with other Tier 1 (and some Tier 2) networks. These make up the core of the Internet.

At the very bottom of the hierarchy, you have Tier 3 networks. These networks purchase access to Tier 1 and Tier 2 networks so that they can then provide Internet access to home users like you and me. This web of peering is how you can send an email from the U.S. to Japan in the blink of an eye.

If everything went according to plan and all players in the game were only concerned about the greater good of the Internet, then we’d be living in an Internet utopia. Unfortunately, business is business and things rarely ever go according to plan.

When ISP Peering Becomes a Problem

The most common form of peering between Tier 1 networks is something called “settlement-free peering”, meaning that both networks agree to pass the other’s data along for free. The assumption behind this agreement, of course, is that both networks are sending and receiving similar amounts of data.

In other words, Network B agrees to pass along the data of Network A as long as Network A does the same for Network B. As long as both networks are sending and receiving in equal amounts, neither one is getting shafted.

But what happens when the scales start tipping and one network starts sending more data than the other? Suddenly Network B has to carry a lot more data on its network, data that only Network A was paid for (by Network A’s transit customers). Now Network A is benefiting more from the peering agreement.

Now think about this: which ISPs do we use to connect to the Internet? Comcast, Time Warner, and Verizon are three of the biggest home Internet providers in the U.S. right now. To deliver Netflix video data to end users, they have to accept the data from Cogent and pass it along according to their peering agreement.

But in 2013, Cogent accused Verizon of allowing their traffic ports to saturate instead of opening up more ports, which meant that data couldn’t pass through in a timely manner and resulted in the degradation of Netflix performance for Verizon customers.

A similar disagreement occurred in 2010 between Comcast and Level 3, who was Netflix’s traffic distributer at the time.

It turns out that Twitch’s videos were being served out of the U.S. and there was a traffic bottleneck in one of the routes leading from the U.S. to Europe. When one peering relationship was congested, data was detoured through another network and issues ensued.

Peering disputes can also impact other forms of Internet activity, but it’s particularly noticeable for real-time applications like online gaming.

But performance issues aside, there’s another big concern here: the potential death of settlement-free peering altogether. If Internet traffic becomes so lopsided that networks abandon peering relationships for transit relationships, then users like you and me may be the ones who have to bear the costs.